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daser333 [38]
4 years ago
12

Weighted average cost of capital American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its

target capital structure. Currently it targets a 50​-50 mix of debt and​ equity, but it is considering a target capital structure with 70​% debt. American Exploration currently has 6​% ​after-tax cost of debt and a 12​% cost of common stock. The company does not have any preferred stock outstanding. What is American​ Explorations current​ WACC?
Business
1 answer:
saw5 [17]4 years ago
3 0

Answer:

American​ Explorations current​ WACC is 9%

Explanation:

The computation of WACC is shown below:

= (Cost of equity × equity percentage) + (after-tax cost of debt × debt percentage)

= (12% × 50%) + (6% × 50%)

= 6% + 3%

= 9%

Since we have to compute only current WACC so we considered the 50-50 ratio. Hence, we ignored 70% cost of debt

WACC shows a relationship between debt, equity and the preferred stock.

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A trial balance prepared after adjustments have been recorded is called a(n):a. Unclassified balance sheet. b. Classified balanc
Aleks04 [339]

Answer:

e. Adjusted trial balance.

Explanation:

Adjusted trial balance -

It refers to the method of listing the account details of the company which are made after adjustment made after the year's end , is referred to as adjusted trial balance .

It is the fifth step in the accounting cycle , just before the production of the financial statements.

Hence , from the given statement of the question ,

The correct answer is e. Adjusted trial balance .

6 0
3 years ago
Identify the following questions as most likely to be asked by an internal or an external user of accounting information.
charle [14.2K]

Answer:

Find the answers below

Explanation:

1. Shareholders - External users

2. Creditor - External users

3. Nonexecutive employee - External users

4. Research and development director - internal users

5. Purchasing manager - internal users

6. Human resources director - internal users

7. Production supervisors - internal users

6 0
3 years ago
An industry that has one large firm that provides 60% of the supply of the product is called an oligopoly.
frez [133]
The statement " An industry has one large firm that provides 60% of the supply of the product is called an oligopoly" is false. 
Because in an oligopoly  more than one firm dominate the market and in monopoly only firm is dominant. In Oligopoly there is small number of firms but have the market share in large majority.
5 0
3 years ago
Mr. Lainson died this year on a date when the total FMV of his property was $12 million and his debts totaled $450,000. His exec
Kitty [74]

Based on the information given about Mr. Lainson, the taxable estate of the year will be $7,785,000.

The taxable estate for Mr Lainson will be calculated thus:

  • FMV $12 million
  • Less: Debt $450000
  • Less: Funeral expense $15000
  • Less: Legal fees $50000
  • Less: Donation ($3.5 million + $200000) = $3.7 million
  • Taxable estate = $7,785,000

The taxable estate of the year will be $7,785,000.

Read related link on:

brainly.com/question/25641251

5 0
3 years ago
The generic types of competitive strategies include:
Vlada [557]

Answer:

The correct answer is D

Explanation:

GCS stands for Generic Competitive Strategy, which is a methodology designed or created in order to provide the companies or firm with the strategic plan so that to gain as well as complete the advantage within the market place.

There are 2 kinds or types of the generic strategies in order to achieve or accomplish the above average performance in the industry, those are focus, leadership, cost and differentiation.

So, the generic kind of competitive strategies comprise of broad differentiation, focused differentiation strategies, focused low-cost, low-cost provider and best-cost provider.

7 0
3 years ago
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